Self employed, Covid, W-2, Previous yr deductions

[Domney3000]

I was self employed before the pandemic and was on unemployed cause of covid last year. My question is, if I am now receiving a W-2, am I still able to deducted expenses related to my rideshare costs from last year like - upkeep for the vehicle used for business if I didn't work last yr i.e registration, insurence, phone bill etc? I am re-register on the platforms and can start working again as a contractor.

[JamesG1]

Expenses related to the rideshare self-employment activity would be deductible on the 2020 Federal 1040 tax return and not the 2021 Federal 1040 tax return.  Do I understand that you had no rideshare income to report in 2020?

If you filed a 2020 Federal 1040 tax return, you would have to amend the tax return to claim the expenses.  We do not know what would have been reported on such a tax return.  It is possible that reporting such expenses would not change the bottom line refund amount or balance due.

This TurboTax Help explains the amendment process.

[Domney3000]

My last day of work was March 2020 and i filed my 2020 tax return appropriately. 2021tax filing is where I'm wondering if I should claim any existing expenses carried over.  Although I didn't work as a contractor in 2021 I did have upkeep expenses in things I would have used for work had not the pandemic happened

[Vanessa A]

Are you going to continue the business or has the business ended? What type of expenses?  

[Stevos555]

If you have a schedule C for 2021 and only have expenses in 2021 and no income, it's going to be difficult to claim only expenses against zero income form business activity. If the expenses relate to prior year, I would follow advice previously and amend.

[AnnetteB6]

For your 2021 tax return, you cannot claim expenses that you would have claimed if not for the pandemic.  You can only claim expenses if you were still actively working as an independent contractor/rideshare driver during 2021.

It is possible to claim business expenses without any business income, but you must be continuing to operate your Schedule C business in order to claim expenses.  In your case, if you did not continue to seek income as a rideshare driver, you were not operating your Schedule C business.

When you start operating your business and driving for the platforms again, then you can start claiming those expenses.

@Domney3000